| At it's most basic level, business is about selling a | | | | decision performance, only 29% of executives |
| product or service to a market of customers. It starts | | | | believed that poor decision-making structures were a |
| with decisions based on what the market wants, what | | | | common cause of bad decisions, despite 80% of |
| products to sell, what services to create, how much to | | | | respondents indicating that data is the most important |
| charge, how to deliver, how to communicate with the | | | | factor in making decisions. On an encouraging note, |
| market, and so on.This applies equally to large | | | | respondents did rank data-based decisions higher than |
| corporates as it does small and medium-sized | | | | the opinion of others, personal intuition, or external |
| businesses. Regardless of the size or type of | | | | consultancy. |
| business, every aspect of business is decision based. | | | | The report concluded that decision making was at the |
| Yet often we fail to consider how we go about | | | | core of both strategy and operations, with a vast |
| making our decisions. | | | | array of factors used to balance risk and reward. Yet |
| We have marketing systems, planning systems and IT | | | | decision-making was not being recognized as a |
| systems, yet few companies have formal 'decision | | | | strategic asset. |
| systems'. Sure we have sign off processes - but | | | | At a time when the economy and intense global |
| these are unstructured in terms of making a logic | | | | competitive pressure is driving businesses to optimize |
| based decision. Thus, in absence of any formal | | | | every advantage, it is clear from this study that key |
| decision system, we rely on experience, intuition and | | | | decision makers are not getting the data they value |
| some form of collaborative communication to | | | | and need, and are relying more on "gut instinct" than |
| aggregate the 'opinions' of various stakeholders. Does | | | | proven drivers. Obviously, supporting good decisions |
| this result in a 'rational' decision? In 99.99% of cases it | | | | requires a lot more than technology. It requires an |
| does not. Knowledge, experience, gut feel and emotion | | | | Organizational culture based on logic, rather than |
| do not constitute a 'rational' decision platform. Rational | | | | emotion. A culture based upon: |
| decision-making requires visibility of all relevant | | | | - High-quality data - the more acceptable the data, the |
| information, and resolution of various objectives, | | | | more time spent on decision making instead of |
| historical experiences, expectations, preferences, | | | | debating whether the data is correct. |
| alternatives, probability and decision making styles. | | | | - Access to advanced systems and training - high |
| The results of a survey analyzing the current status of | | | | quality systems require data source integration, master |
| corporate decision-making found that more than nine | | | | data management and easy user access to timely |
| out of 10 corporate executives admit they are making | | | | delivery of information in formats that support rapid |
| important decisions on the basis of inadequate | | | | assimilation and action. |
| information. More than half of these senior executives | | | | - Sound management - including governance, |
| are concerned that they may be making poor | | | | compliance and risk management |
| decisions as a result of missing information. And a | | | | - Trust - in both the data and the interpretation of data |
| quarter believes that management frequently or | | | | by others |
| always gets its decisions wrong. | | | | - Flexibility - to adapt actions to new insights |
| These poor business decisions can cost an | | | | *In Search of Clarity: Unravelling the complexities of |
| organization millions of dollars. The main findings | | | | executive decision-making. A Report from the |
| demonstrated few executives received the | | | | Economist Intelligence Unit Sponsored by Business |
| information they need, and most believed that | | | | Objects |
| management decision-making was only moderately | | | | In my next article, I will further explore the culture |
| effective, or worse. If these findings are not significant | | | | required to support a logical organization. |
| enough, the bigger concern is that in spite of such | | | | |